The telecommunication industry has developed a telecom network that includes plug-ins (usually called “plugs”) to provide various telephone-related functionalities. The plug is typically an electronic circuit board. Some telecommunication network has about 38 million plugs worth about $12.5 billion in assets. There are more than 10,000 different types of plugs installed and active in a wireline network, grouped in different plug families. One issue with this involves determining what are the appropriate locations and quantities of field spare plug inventory that should support network maintenance and growth. In general, field inventory is placed in local warehouses, work centers where field technicians report to, central offices (where the telephone switch resides) and technician trucks. The desire to avoid interruptions in service to end customers drove traditional spare inventory management schemes to overstock and deploy more spares in the field than actually needed in terms of managing the network.
At times, telecommunication companies have done massive recoveries that reclaimed the spares in the field. One way to reduce field inventory, among others, is to freeze purchases of the plugs and force the field workers to exhaust the spares that are in field trucks and local buffers. However, this method is crude and inefficient since it does not discriminate between highly critical and normal needs and it ignores amounts of overstocking at individual locations. Worse, the method can further promote hoarding behavior by rewarding field locations that overstock the most. In addition little attention has been paid to the proliferation of locations where spares are located. Multiple inventory locations lead to further increases in inventory through inventory duplication, negating the benefits of inventory consolidation. Finally, it is not sufficient to locate and size inventory appropriately. The improvement should be maintained over time. From there the need of establishing proper control tools and methods exist that measure the gaps that develop between ideal and real systems, and help sustain the benefits.
While commercial inventory software has been developed to address spare part inventory management, none addresses the unique set of circumstances and variety of needs described above, which are typical of telecom service provider companies.
Until recently, telecom service providers emphasized the delivery of excellent service with high levels of technician productivity, while the issue of excess field spare inventory was considered secondary and was addressed with crude methods such as freezing purchases and stopping shipments to the field. An additional challenge is to correctly design the process tasks that need to take place to initially deploy an inventory system of this nature, since in its initial state management of field inventory is usually completely decentralized, inventory warehousing locations are not where they should be, and field policies and metrics favoring customer service over efficient field inventory management are in place. Furthermore there are usually not adequate data collection methods and standardized data repositories in place to help in the implementation of more scientific methodologies. Hence there is need for a well-defined, transparent process to undertake this transition.